Brand vs Commodity

Small businesses know they need to differentiate themselves from the competition. But how can you do that? Many small business owners think of branding as a luxury or an unnecessary expense, but it’s actually something that every business needs in order to survive and thrive.

The difference between a brand and a commodity is threefold. A brand has personality, stands for something, and has an offer that differentiates itself from its competitors.


Macro photo of tooth wheel mechanism with imprinted KNOWN, UNKNOWN concept words By EtiAmmos via Shutterstock

You Know a Brand When You See One

No matter the industry, from real estate to food to automobiles, the market always tries to force companies and products into a commodity. This is because commodities, like corn or steel, are price driven, and consumers still want the lowest possible price. Take Walmart for example. They’ve done a brilliant job forcing most of their products to behave like commodities. Because they can get products for cheaper than almost anyone else, they can wipe out their competition and gain even more price-conscious consumers.

Only Walmart can be Walmart, so to escape being crushed by commodification, you need to build a brand worthy of sticking in the minds of your customers.

1. Brands Connect with Emotion. Commodities Connect on Price

Brands are the opposites of commodities, and you only need to look to your morning cup of coffee to understand the difference. Brands like Starbucks can take a cheap commodity like coffee and get people to buy a $5 cup as part of their daily routine. There are countless ways to get a more inexpensive caffeine fix, and yet Starbucks enjoys legions of loyal fans all over the world. This is because they’ve keyed into a core component of running a top-notch brand: customers get a consistent, positive emotional experience every time they interact with the company.

Humans are fundamentally emotional creatures. The greatest brands, from Apple to Starbucks to Coca-Cola, illicit immediate emotional reactions just from seeing their logo or hearing their name. They speak our language of emotion and incorporate themselves into our belief systems. Are you an Apple or an Android person? A Coca-Cola or a Pepsi lover? Brands ingrain themselves in our very identity, and either attract or repel us based on what side you choose. The critical question for strengthening your brand is to answer the question “how does my company make people feel?”. If you have a great answer to this question, your brand is well on its way to success.

 2. Brands are Visible. Commodities and Invisible

Simply providing a positive emotional experience does not a great brand make. In addition to an emotional connection, there are three key elements that top brands share: their visibility, size, and brand equity. McDonald’s has done a masterful job of combining size and consistency. The McDonald brothers had a successful operation in the early 1950’s, but it was Ray Croc that pioneered the notion of a nationwide fast-food chain that was the same anywhere you went. In fact, with over 14,000 restaurants in the United States these days, you can never be more than 115 miles away from the nearest McDonalds. There are few things more consistent in American life than the presence of those golden arches, where you can get (more or less) the same options and quality from coast to coast.

Brands ingrain themselves in our very identity, and either attract or repel us based on what side you choose.

Visibility comes along with size, as brands like McDonalds and Coke are woven into the very fabric of our culture. Newcomers to the mega-brand status like Amazon are even more tightly incorporating themselves into our way of life. From your expectations for free two-day shipping to your upscale grocery stores to web servers that power the internet, Amazon is on its way to impacting every area of modern American commerce.

The point here isn’t to become the next Amazon or Starbucks (as if it were only that simple). Rather the goal is to focus on long-term growth over short-term profits while maintaining consistent branding and quality. Amazon didn’t turn a profit for years and years, and now that it has become a vast empire it’s one of the most valuable companies in the world.

The key is to focus on long-term growth over short-term profits while maintaining consistent branding and quality

In addition to size and visibility, the greatest companies have keyed into the equity of their brand’s position in the marketplace. Developing brand equity is extremely beneficial, as you can license your brand’s name and imagery to products or services that you don’t directly produce. Trump can license his brand out to other developers and generate royalties without actually developing real estate. Ferrari can boost their profit by allowing their iconic emblem and name to grace a variety of consumer products that have nothing to do with cars.

Brands Put Long-Term Promise Over Short-Term Profits

Does Apple have the best computers on the market? Some might say they do, but that’s not why they can charge an enormous amount of money for functionally you could get at half the price. The simple fact is their customers believe their products are better than anything else, and they’re willing to pay whatever Apple cares to charge.

This is the power of a successful brand. It convinces people to value what you offer for far more than a similar product from a competitor. Granted Apple would be nowhere if they didn’t hold up their end of the bargain with top product design and an inviting user interface, but it’s their brand that ultimately drives their enormous profits.

A solid brand convinces people to value what you offer for far more than a similar product from a competitor.

In many ways, your brand is more important than your business. A successful brand can pivot from business to business and turn out profitable results. Is Amazon successful because it had a successful book-selling business, or because it’s a stellar brand? A brand can incorporate any number of companies, but it’s much harder to turn a business into a brand. Phenomenal brands don’t happen overnight or without a lot of painstaking work.

You Can Build Your Brand on a Budget

I got my brand off the ground by cold-calling potential funders to raise money for his real estate ventures. Over the next few years, I proved my brand could turn those funds into profitable ventures, and the cold-calling was no longer necessary. Now that I have an established and trusted brand, funders actually seek me out in hopes of making a deal. My brand speaks for itself, which only increases its visibility in the real estate market. This cycle of growth and an increase in visibility have a compounding effect, where you’ll soon have more opportunities than you know what to do with.

Cherish your brand and guard it with your life. It is your lifeblood, even if your business isn’t firing on all cylinders at the moment. Your brand is your identity: if you don’t actively define it someone else will, and it will be nearly impossible to redefine.

Branding Books for Small Business

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More DIY Branding Resources

7 Branding Exercises: Here are 7 simple DIY Marketing exercises you can use to create or tweak your brand.

Make Your Marketing Message Irresistible: Your marketing message is the “last name” to your brand.  It tells the world what you promise and why.

5 Questions to Create Your Marketing Message: Still feeling stuck with your branding or marketing message? Try answering these 5 questions and see what happens.

Some Tools You’ll Need to Fire Up Your Brand

Branding and messaging work require a lot of brainstorming.  Here are a few tools that I’ve used to develop my marketing messages as well as those for clients.

Sticky Notes and Index Cards

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All of these branding exercises will generate individual thoughts and phrases — write each one down on a single sticky note or index card.  Then you can group them or rearrange them easily to craft your perfect branding message.


A great brand requires your own unique language.  When you have those brilliant ideas or you say or repeat a phrase over and over — capture it in a notebook.  You’ll be glad you did.  After a few weeks or months, you’ll be amazed and the unique way your brand stands out from competitors.

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